10-QPeriod: Q3 FY2007

AMAZON COM INC Quarterly Report for Q3 Ended Sep 30, 2007

Filed October 25, 2007For Securities:AMZN

Summary

Amazon.com, Inc. (AMZN) reported its third-quarter and nine-month results for the period ending September 30, 2007. The company demonstrated strong top-line growth, with consolidated net sales increasing by 41% year-over-year in the third quarter to $3.26 billion, and by 36% for the first nine months to $9.16 billion. This growth was driven by robust performance in both the North America and International segments, with significant contributions from increased unit sales and expansion in categories like electronics. Profitability saw a notable improvement compared to the prior year. Net income for the third quarter rose to $80 million, a substantial increase from $19 million in the same period last year. Diluted earnings per share were $0.19 for the quarter. The company's focus on long-term, sustainable growth in free cash flow per share remains a key strategic objective. Free cash flow for the trailing twelve months ended September 30, 2007, more than doubled to $800 million. Amazon continued to invest in technology and content, as well as in expanding its fulfillment capacity, signaling ongoing commitment to improving customer experience and operational efficiency.

Key Highlights

  • 1Consolidated net sales grew 41% to $3.26 billion in Q3 2007, and 36% to $9.16 billion for the nine months ended September 30, 2007.
  • 2Net income significantly increased to $80 million in Q3 2007, compared to $19 million in Q3 2006.
  • 3Diluted earnings per share were $0.19 for Q3 2007, up from $0.05 in Q3 2006.
  • 4Free cash flow for the trailing twelve months increased 118% to $800 million.
  • 5International segment net sales grew 40% in Q3 2007, representing 45% of consolidated net sales.
  • 6The company continued to invest heavily in technology and content, with capital expenditures of $151 million for the nine months ended September 30, 2007, primarily in website development and infrastructure.
  • 7Stock-based compensation expenses increased to $51 million in Q3 2007 from $30 million in Q3 2006, reflecting a higher value of stock awards granted.

Frequently Asked Questions

Amazon reported consolidated net sales of $3.26 billion for the third quarter of 2007, representing a 41% increase compared to $2.31 billion in the same quarter of the prior year.

Net income for the third quarter of 2007 was $80 million, a substantial increase from $19 million reported in the third quarter of 2006. Diluted earnings per share rose to $0.19 from $0.05.

Amazon's primary financial focus is on long-term, sustainable growth in free cash flow per share. For the trailing twelve months ended September 30, 2007, free cash flow increased 118% to $800 million. The company continues to invest in technology, content, and fulfillment capacity to enhance customer experience and improve operational efficiencies.

The International segment showed strong growth, with net sales increasing 40% year-over-year to $1.47 billion in Q3 2007, accounting for 45% of total consolidated net sales. The company anticipates international sales may eventually represent 50% or more of consolidated net sales.